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From: mazlack@ernie.BERKELEY.EDU (Lawrence J. &)
Newsgroups: net.invest
Subject: Re: Mututal Fund problems
Message-ID: <11490@ucbvax.BERKELEY.EDU>
Date: Tue, 21-Jan-86 20:18:43 EST
Article-I.D.: ucbvax.11490
Posted: Tue Jan 21 20:18:43 1986
Date-Received: Thu, 23-Jan-86 20:25:24 EST
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Reply-To: mazlack@ernie.UUCP (Lawrence J. Mazlack)
Organization: University of California, Berkeley
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>>The fund is: UNITED SERVICES "PROSPECTOR"
>>
>>Current PROSPECTOR shareholders may have a claim against some ot the other
>>assets of the other funds.
>>
>>...Larry Mazlack
>
>Supposing I'm a current shareholder in the Prospector Fund, if I redeem my
>position now am I giving up all rights to any money that is returned later
>via the insurance claims?  Do I have to stick it out or can I get out now
>and still benefit from insurance claims?

A good question. The answer is I don't know for sure. If there was a law
suit for damages, I think that the shareholders who were damaged, 
irregardless of their current holdings, would get a pro-rata share of
the settlement.  However, as the insurance has the fund as the beneficary,
I think that you have to stick it out to recover.  I.e., anything that
comes in becomes part of the assets of the fund. Likewise, there are
substantial fees that the Advisor took that he wasn't entitled to.  The
Advisor will (one way or the other) probably end up repaying all or some
of them. I think that these also become fund assets for division by the
existing shareholders.

Obviously, the happier path would be to sell out now, and recover later.
But, I don't think that this will happen.

But, I do wish that I was a lawyer in Texas (where the fund is located),
so I could try the courts.

...Larry Mazlack